The World Bank Board of Executive Directors has approved 200m US dollars from the International Development Association for Tanzania Rural Electrification Expansion Programme. A newly approved loan for the programme will connect 2.5 million poor households in rural areas to the national electricity grid over the next five years.
The Programme aims to build on the recent achievements of expanding nationwide access to 36 per cent in 2014. In addition, the Programme will scale up the supply of renewable energy in rural areas while strengthening sector institutional capacity.
“Access to electricity is critical to extend economic opportunities and reduce poverty,” noted Bella Bird, World Bank Country Director in Tanzania, who also covers Malawi, Burundi and Somalia.
“This programme not only offers the opportunity for many more Tanzanians to have access to power in their homes and businesses, but also enables small power producers to access finance to invest in production, including with renewable energy sources,” she added.
The Tanzanian government is currently implementing a national energy policy whose goal is to increase the country’s overall electricity connectivity to 50 per cent by 2025 and to at least 75 per cent by 2033.
The National Rural Electrification Programme (2013-2022) under which the new Programme is to be implemented, includes both on-grid and off-grid solutions and has four priorities.
These are the connection of new customers to the grid in already electrified settlements; new connections to the grid; electrification through off-grid investments and the development of distributed technologies, in particular off-grid solar and other renewable technologies.
In addition to household beneficiaries, the financing will also benefit 25,000 education facilities, 25,000 health facilities, 150,000 businesses. Small Power Projects will also benefit from access to capital to enable them to contribute 33MW in renewable energy under the Programme.
“The Programme comes at a time when the government has embarked upon an important long-term power sector restructuring plan which will greatly improve transparence, performance and efficiency that are vital for future expansion achievements,” said Nataliya Kulichenko, the World Bank’s Senior Energy Specialist and Task Team Leader.
Recent increases in access have been attributed to key government actions including a 2013 Parliamentary resolution that resulted in more financing to the Rural Energy Fund using a petroleum levy and the reduction in connection fees for the final consumer owing to improved technologies as well as an increase in government subsidies, effective since January 2013.
The World Bank is supporting ongoing projects in Tanzania’s energy sector including power generation and capacity strengthening in addition to two recent development policy operations in 2013 and 2014.
Among the recent significant achievements registered in the sector is the progress of the gas-to-power programme – a key medium to long-term cost reduction measure, enabled by the completion of a large gas transmission pipeline, connecting producing fields in Mtwara and Songo-Songo to Dar es Salaam.
A new 150MW gas power plant (Kinyerezi I) has been completed while the construction of another 240MW gas power plant (Kinyerezi II) has also begun.
With the increased gas production and gas becoming available to all existing and newly commissioned power plants in Dar es Salaam area, this has eliminated the need for using more costly liquid fuels in those plants and significantly reduced the cost of generation.
Credit: All Africa